Insight

Qantas finds tonic in Cathay's poison as Chinese tour Australia

04/05/2017|5:41:21 PM|Bloomberg

Australian carrier Qantas is bringing a record number of Chinese visitors to Australia and generating new business which ferries the tourists on its local network.

Hong Kong-based airline Cathay Pacific posted its first loss in eight years last month, overwhelmed by pricing competition from mainland rivals including China Eastern and China Southern. Australian carrier Qantas is doing the opposite: it is bringing a record number of Chinese visitors to Australia and generating new business which ferries the tourists on its local network.

Chinese tourists in Australia typically take two or three domestic flights to popular destinations such as Uluru, the Great Barrier Reef or Tasmania, according to Qantas. That’s easy money for a national carrier that controls almost two-thirds of the local market, and whose domestic network makes almost twice as much profit as its international flights.

Australia drew 1.2 million Chinese visitors in 2016. In 10 years, that number could snowball to 4 million if projections bear out. Arrivals from China and Hong Kong reached fresh highs in January, Australian government data showed.